Promoted Tweets: Why Hootsuite Has More to Lose and Why Twitter (Probably) Doesn't Care

If you’re using Hootsuite as your twitter management tool, you may have been wondering about the yellow “promoted by” button showing on some tweets. This is the lovechild of Twitter and Hootsuite in an attempt to grow both companies’ revenue family. Currently, the only way to disable the yellow buttons is to have a Hootsuite pro account at $5.99/month and check off the button that says “show promoted tweets.”

First, let’s agree that every company should be able to make money off of its products. Let’s also agree that creating actionable and profitable business models are probably among the most challenging endeavors companies (any company) have to take on at some point in their lifetime.

In an ideal world, the more valuable the product or solution, the more money a business should be able to make. Web2.0 however has been a rather imperfect world, and some of the most useful applications have actually been free (case in point: Twitter over the last couple of years).

Being the leader in the micro-conversation world with no real competition in the market, Twitter can afford to test various ad solutions. If people are truly unhappy with it, Twitter could easily change their approach with little impact. Hootsuite may enjoy the thought of riding on the Twitter tale, but in fact, the damage can be much greater to the Hootsuite brand (a number of equal alternatives, minimal switching cost, etc.)

What’s so bad about promoted tweets?

The concepts of people promoting brands, growing brand awareness,  and creating word-of-mouth are well established. Peer recommendations are much more influential on Awareness, Preference, and Choice metrics. In 2009 Nielsen reported that 90% of consumers “completely” or “somewhat” trusted peer recommendations compared to 70% trusting brand websites.  Search Engine results ads are only trusted by 41% and online banner ads were trusted by 37% of people. For some of us it’s Apple products, for others it’s Virgin America, yet for others it’s the president (yes, Obama is a brand too). We listen to the people we already trust and discover new products and companies through them.

Some brands don’t need to recruit advocates—they come naturally because of great products (Apple) or experiences (Cirque De Soleil, Disney). Other brands, pay through discounts, coupons, and special promotions that result in brand awareness and purchases.

Unfortunately for Hoostuite, Promoted Tweets has provides very little value to users. Most people will probably look to filter out the useless promoted tweets. The only ways to eliminate them are to a) pay $5.99/month, b) pretend the tweets aren’t really there, c) not use key word streams.

But wait. We said it’s okay for a business to make money?

That’s right! And Hootsuite couldn’t be in a better position to do just that. Hootsuite today is in an advantageous position: it has a large user base, preference from Twitter users, and an ability to deliver great user experience. With Tweetie’s latest integration challenges, it has been picking up speed on mobile devices as well. It has options. Here are a few to boot:

1. Charge for value: Provide features that people actually want and need and charge for those. Currently, the Pro version doesn’t offer that much added value to convince people to increase their commitment to Hootsuite.
2. Charge for extensions: Charge for the mobile and iPad applications as productivity tool on the go. Users will easily pay $0.99 to be able to use Hootsuite on their phones especially with Tweetie’s hiccups.
3. Give and receive: Offer Opt-In option to people who agree to see the ads in return for a free feature.
4. Charge more smartly: Create a Hootsuite for Business and charge for it. This means that Hootsuite will need to reframe its Pro offering -- currently a blend of features wanted by individuals, those more likely to be used by business, and some useless features like influencer score, easily achieved through Klout, and already integrated into the Free version.

One thing is certain: Hootsuite shouldn’t be putting itself at the mercy of Twitter and using its own audience base as lab rats.

Hootsuite has done a great job with feature enhancements, usability, and overall value. The company gets what it takes to make good products people want to use. However, the recent integration of Promoted Tweets shows a significant gap in Hootsuite’s ability to complement its product side with a solid business strategy and execution.

Let’s hope Hootsuite’s leadership team, with the helm of Ryan Holmes, sees that too and comes up with original, creative, and sustainable business models that benefit users and grow revenue for the company.

Comments

[Bob]

When your shakey business model includes relying on another company with no business model, you probably need to rethink your business model.

[Kimmo Linkama]

I haven't really looked at HootSuite's Pro version because the free one fulfils my needs. From that standpoint, my feelings about Promoted Tweets:

1. They are not (at least yet) too intrusive.

2. They are clearly marked, so you can exclude/ignore them if you wish.

3. They are not useless (have caught myself clicking on some)

4. Those that I find useless are easily filtered out (in human terms, ignored, like all other online advertising that seems irrelevant)

5. It isn't really about value for users, is it - rather revenue from advertisers/promoters?

6. What would be the "original, creative, and sustainable business models that benefit users and grow revenue for the company"? I think HootSuite is doing a pretty good job of introducing ads in our streams without excessive irritation.

[CAROL JONES]

Greetings from rural Australia.

I've just had three unhappy days of unwanted, unsolicited Promoted Tweets on my Hootsuite stream and can only say they are utterly intrusive.

They can't be deleted. And sit at the top of my Hootsuite stream like an annoying, barking dog. For hours. One ad pestered me for more than 12 hours. And was totally unsuited to me. I'm in Australia. The ad was for an American service. So they've no idea of the demographics of the customers they're annoying.

There's a given in business. Once a business offers a service/product/feature for free, customers resent being asked to pay for same. Me included.

If the only way to avoid these intrusive ads is to pay, I'll opt out of Hootsuite. Even though, until a few days ago, I was totally in love with it.

But being abused with ads is not a good business decision. On the part of both Hootsuite and the company being told Promoted Tweets enhance my Twitter experience.

Your post is very timely. And absolutely spot on. I do think Hootsuite has much to lose. As do the companies who are using Promoted Tweets.

Twitter doesn't care. They're not making any money now, so the loss of a few users who don't want to be bombarded with unwanted ads doesn't matter to them.

But their advertisers should care a great deal. It's no longer acceptable to annoy people with unwanted, unsolicited 'in your face' online advertising that can't be ignored or avoided.

Many thanks for allowing me to express my opinion.

Take care,

Carol

[Kimmo Linkama]

Carol, aren't you being a bit harsh? Your own site's home page has 10 ads/affiliate links. Considering the speed tweets accumulate, I really don't see how promoted tweets could be 'in your face'.

I don't think it's possible today to surf the web without bumping into advertising. If it's irrelevant to you, just ignore it.

[Ravit Lichtenberg]

Hi Kimmo,

Thank you for sharing from your experience and expressing some counter points. It is true that the ads are clearly marked and, it's interesting to find that you've found some of these useful! I think that's great.

In my perspective, with over 2000 followers on Twitter, the ads are becoming more visible. And, from information processing perspective I can guarantee that it *will* become more cognitively tasking to filter through what's good content and what's not, once Hootsuite increases the rate of ads showing (and they will, if they really want to make money). This will result in subtle annoyance associated with the Hootsuite brand--not a good thing. There are many creative business models to draw from, or at least, Hootsuite should let users Opt Out (just like the SPAM Act requires in email newsletters).

Thanks for a good argument. Always appreciate the conversation!

Ravit

[Kimmolinkama]

Yes, if the amount of advertising increases along with your follower count or with the breadth of topics you tweet about, then I can understand there will be friction.

I'm not a great fan of ads being forced on me either, but I've accepted it as a fact of life that you can't escape it. I think more and more people are becoming conditioned to tune out anything that even looks like advertising.

I agree with you in the sense that every person has an "overload threshold" after which he or she will start looking for a more pleasant (read: less ad-infested) online experience. Alternatives abound.

HootSuite probably knows this all too well. It will be interesting to see how they and all other free-service providers looking for revenue will match the public's aversion to advertising with their need for income.

[Ravit Lichtenberg]

Kimmo, Carol--

It is an interesting point about our tolerance to ads. We've become oblivious to billboards even though they take up much bigger space than anything on the computer. Banner ads are in the same pile. There's also greater tolerance to ads on public domains, such as Carol's website, the Wall Street Journal online or even Facebook. The issue of ads intensifies due to two factors: 1) when ads are forced on what is perceived by people as "private" (right or wrong) and 2) When ads are forced into paid experiences. Tivo made a business out of helping people get rid of ads. They tapped into the psychology of "I paid for it, I should have a say."

I believe that people's tolerance of promoted tweets (that threshold) will be greatly influenced by their perception of privacy. If they invested in creating a twitter presence, conversations, and relationships with their community--they will consider Hootsuite ads more intrusive. If they see Hootsuite as more of a public domain (and perhaps spend most of their time browsing for others' tweets rather than post as much) they may feel it is less intrusive.

In the end--I too am curious to see how things will unfold. Most likely, Hootsuite will figure out the max threshold and cap the ads there. We'll need to see if that's sufficient as a revenue stream generator. My guess is they'll need to find other ways to make money.

Thanks again for the conversation!

Ravit

[Carol Jones]

KIMMO,

Greetings from rural Australia.

I give up.

Where are the ten ads/affiliate links on my homepage of http://www.interfaceaustralia.com?

Could you please be honest with me and tell me what you consider to be these links and affiliates?

There's nothing on my site other than my product range. And yes, I have a mailorder business. So talk about my products. Because people find me on Google and expect to read about what they've clicked.

Is that what you call ads?

I've also no affiliate links. Every product is purchased from my shopping cart. There is no link on my site taking a visitor to another site. Only to the appropriate page for each product.

Do you consider a page devoted to each product an affiliate link?

To further this point. Seven products are my company's patented designs. Three products are owned by business friends which I offer to my customers from my site.

I'll ask you again. Are you sure you've clicked on the right website? This is the link. http://www.interfaceaustralia.com.

By the way, I've not changed my opinion about Promoted Tweets. And I'm delighted to see that I'm not alone.

I think you've totally missed my point about Promoted Tweets.

The point is: you cannot delete them or close them down. They sit at the top of my Hootsuite stream for hours. They don't budge from that position.

And your comment that "Considering the speed tweets accumulate, I really don't see how promoted tweets could be 'in your face'" makes me think that you haven't yet experienced a Promoted Tweet staring you 'in the face'.

Everywhere else that I've visited on the web there's a box with an X in it that you can click to say Close/Go Away!

There is no escaping a Hootsuite Promoted Tweet. I've had one ad every day for up to 12 hours. I call that pestering!

Hopefully you can appreciate this major difference.

Many thanks once again for the privilege of allowing me my say.

Carol

[Carol Jones]

RAVIT,

Greetings from rural Australia.

I read your comment with interest.

And yes, we're all different. And have different levels of tolerance to advertising.

I'm an accidental business. I'm not in retail stores. Don't advertise in the media. I depend on Google and my position in the first third of a Google page for my keywords for every product, to drive traffic to my website.

And use direct mail to small, niche institutional markets with an opt-out form with every mailing.

And my existing 200,000+ customers around the world to help spread my message.

Twitter is my private domain. I follow less than 50 people and engage in one-on-one conversations with them. I've yet to even tweet the link to my website to my Twitter friends. If followers want to know more, it's at the top of my Twitter profile. And yes, they do that and I've had several orders from my Twitter conversations.

I treat Facebook the same. My friends are mainly in business and we engage in helping each other. Not selling to each other.

I have a Facebook Fan Page but have yet to promote it.

So my strong reaction to Promoted Tweets is because I'm not an avid advertiser. I even refuse to collect email addresses on my website because I consider that an intrusion into the web experience of a visitor to my site.

I believe in advertising. And have found many products that I use because of advertising. But until now, it's under my own steam. Not advertising that's forced on me.

As are Promoted Tweets.

How this will wash out is interesting to follow. But I can't for the life of me figure out how companies can think pestering people is a good business decision.

Many thanks again, Ravit, for allowing me my opinion.

Take care,

Carol

[Carol Jones]

RAVIT,

Greetings from rural Australia.

Just discovered you can now opt out of Promoted Tweets on Hootsuite.

Click the Owl. Click Settings. Click Preferences. Uncheck box that says 'Show Promoted Tweets'.

Save Preferences.

My Promoted Tweeters will be soooooo deliriously happy to see the end of my Reply Tweets asking them to go away.

Hope this helps others.

Take care,

Carol

[Steveoffutt]

Carol,
When I checked the box an ad for Hootsuite Pro popped up. I can't opt out with the free version.

[air max]

With all good wishes for a brilliant and happy Christmas season. Hope things are going all right with you.